In Vandoorne NV v Belgische Staat (ECJ Case C-489/09) the Belgian government had notified the EC Commission in 1977 that Belgian VAT legislation provided that ‘the VAT that is due when manufactured tobacco products are imported and supplied is payable at the same time as excise duty when the manufacturer or importer purchases the tax labels. No VAT is charged at later stages but naturally no deduction can be made. All sales of manufactured tobacco products must be invoiced inclusive of VAT.’ Notwithstanding this provision a company (V) subsequently reclaimed input tax in respect of supplies of manufactured tobacco which it had made to another company. The tax authority rejected the claim and V appealed contending that the Belgian VAT legislation went beyond what was permitted by Article 27 of the EC Sixth Directive. The case was referred to the ECJ which rejected...
